The UAE cabinet has approved a proposal to extend a deadline for companies to comply with the 2015 commercial companies law until 30 June 2017, the Ministry of Economy has announced.

UAE companies previously had until 30 June 2016 to update their memorandum of association and articles of association in line with the new law.

The one-year extension will allow more than 220 companies to make the changes.

Companies that do not comply will be fined AED2,000 a day, and could even be threatened with dissolution.

The Minister of Economy Sultan bin Saeed al-Mansouri proposed the extension, after requests from the Securities and Commodities Authority, the Departments of Economic Development is all emirates, and a number of companies. This was due to the difficulty of holding general assemblies for some companies and the time required to complete the statute amendments and obtain government approvals.

The changes to the memorandum and articles of association are relatively minor. They include additional details of shareholders, removal of references to the old law, the use of international accounting standards, quorum of the general assembly and valuations for pre-emption of shares.

The requirement does not apply to freezone companies.

The UAE’s Commercial Companies Law was issued in July 2015, and aims to update the regulation of companies in a rapidly growing and changing economy, but many think the much anticipated law has fallen short of the expectations of the business community.